The (in)effectiveness of risk mitigation guarantees in public-private partnerships (PPPs) by decentralized governance entities in Mozambique, in light of their administrative, financial, and asset autonomy

Abstract

This article examined the effectiveness of risk mitigation guarantees in Public-Private Partnerships (PPPs) entered into by Decentralized Governance Entities in Mozambique, considering their administrative, financial, and patrimonial autonomy. The study sought to understand the extent to which the legal mechanisms of state oversight over the activities of these entities have been effective in identifying and mitigating risks inherent to PPPs, particularly given the autonomy granted to these decentralized bodies. The primary objective was to analyze the oversight mechanisms for risk mitigation guarantees adopted by Decentralized Governance Entities. To achieve this, the research employed a qualitative approach based on bibliographic review and documentary analysis. The findings indicate that instruments such as inspection, auditing, inquiry, and investigation, as provided in Articles 8 and 9 of Law No. 5/2019 of May 31— which establishes the legal framework for state oversight over decentralized governance bodies and local governments— have not proven effective in controlling and mitigating risks in PPP contracts signed by local governments. This ineffectiveness is primarily due to the fact that state oversight is limited to verifying the legality of contracts without assessing their substantive merits. In light of these findings, the study recommends reviewing and improving these mechanisms to ensure more efficient and comprehensive supervision, thereby strengthening legal certainty and the sustainability of public-private partnerships within the framework of decentralized governance in Mozambique.